Update on English Legal Advice Privilege Following the Aabar Holdings v Glencore Judgment – Sidley Austin

It is effortless to assume that a ruling handed down in the English Commercial Court is just white noise for those of us operating out of Manhattan. After all, the legal distance between the Southern District of New York (SDNY) and the High Court in London feels like an ocean. But for the hedge funds in the Financial District or the multinational conglomerates headquartered in Midtown, the recent judgment in Aabar Holdings SARL & Others v Glencore PLC & Ors is far from irrelevant. In the world of high-stakes international litigation, the definition of “privilege” is the difference between a protected strategy and a catastrophic leak of internal communications.

For years, the prevailing wisdom in English law—and by extension, for the New York lawyers managing UK-based subsidiaries—was that legal advice privilege was a narrow alleyway. If a communication didn’t pass directly between a lawyer and a client, it was generally fair game during discovery. This created a precarious situation for executives. An email sent from a CFO to a CEO discussing how to implement legal advice received from outside counsel was often viewed as “intra-client” communication and therefore not privileged. In the aggressive discovery environment of the UK, this meant that the “dominant purpose” of the communication was often ignored if a qualified lawyer wasn’t a direct party to the email chain.

The Shift in the “Dominant Purpose” Doctrine

The Aabar v Glencore decision, handed down in April 2026, fundamentally shifts this landscape. The Court has clarified that legal advice privilege can, in fact, extend to certain intra-client communications and documents, provided they were created for the dominant purpose of obtaining legal advice. This is a significant victory for corporate secrecy and a welcome alignment with the more expansive protections we are accustomed to under the attorney-client privilege standards common in the United States.

To put this in perspective, imagine a corporate team at a firm near the New York Stock Exchange (NYSE) coordinating a response to a regulatory inquiry. Under the old interpretation of the Three Rivers (No 5) precedent, the internal brainstorming sessions and the “pre-legal” memos circulating among the executive suite might have been discoverable in a London court. Now, if those documents were created specifically to prepare the ground for legal counsel, they may remain shielded. This reduces the “privilege gap” between the US and the UK, allowing NYC-based legal teams to breathe a bit easier when managing global document productions.

The Death of the Shareholder Rule

Beyond the intra-client victory, the judgment reinforces the abandonment of the so-called “Shareholder Rule.” For the uninitiated, this rule was long understood to prevent a company from asserting privilege against its own shareholders. In a city like New York, where shareholder activism is a constant pressure for any publicly traded entity, this distinction is critical. The Court’s decision, endorsed by the Privy Council in Jardine Strategic Limited v Oasis Investments II, confirms that the company’s privilege does not simply vanish because a shareholder is the one requesting the documents.

This creates a fascinating ripple effect for corporate governance. When a board of directors in a Manhattan skyscraper is navigating a hostile takeover or a derivative suit, the ability to maintain privilege over internal legal deliberations—even when facing pressure from major investors—is a powerful tool for stability. It prevents the “weaponization” of internal legal memos by shareholders who might otherwise use the UK’s more rigid disclosure rules to fish for ammunition.

Why This Matters for the New York Legal Ecosystem

New York City remains the global nexus for international arbitration and cross-border finance. When a dispute arises involving a contract governed by English law but litigated by parties based in the US, the “disclosure” phase is often the most expensive and risky part of the process. The Aabar ruling means that the “document dump” typically required by English courts may now be more curated. Legal teams can now argue more effectively that internal communications—once considered “naked” and unprotected—are actually integral parts of the legal advice process.

However, this isn’t a blanket license to hide documents. The “dominant purpose” test remains a high bar. It is not enough for a document to be “related” to legal advice; the primary reason for its existence must be the pursuit of that advice. For the practitioners at the New York Bar Association and the thousands of associates grinding away in Big Law, this means a renewed focus on how internal memos are drafted. We are likely to see a surge in “privilege-conscious” drafting—where the intent to seek legal counsel is explicitly stated at the top of every internal chain to ensure it meets the Aabar criteria.

Navigating the New Privilege Landscape in NYC

Given my background in analyzing the intersection of global regulatory trends and local professional services, this shift requires a specific kind of expertise. If you are managing a company with UK interests or facing litigation that spans the Atlantic, you cannot rely on a generalist. The nuance of “intra-client privilege” is too thin a line to walk without a specialist.

If this trend impacts your operations in the New York area, here are the three types of local professionals you should be consulting to protect your organization:

Cross-Border Litigation Strategists

You need attorneys who are not just licensed in New York, but who have a deep, practical understanding of the English Commercial Court’s current mood. Look for practitioners who have previously argued before the High Court or who have a dedicated “London Desk.” The key criterion here is their ability to conduct a “privilege review” that satisfies both SDNY and UK standards simultaneously.

International Arbitration Specialists

Since many of these disputes are handled via the LCIA (London Court of International Arbitration) or ICC, look for specialists who understand how the Aabar ruling affects the “Redfern Schedule” (the document used to negotiate discovery in arbitration). They should be able to demonstrate a track record of successfully resisting overly broad disclosure requests in international forums.

Corporate Governance & Compliance Auditors

To truly benefit from the “dominant purpose” protection, your internal communication habits must change. Look for consultants who specialize in “Privilege Audits.” They should be able to implement internal protocols—such as specific labeling and routing systems—that provide a verifiable paper trail showing that intra-client documents were created specifically for legal purposes.

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